Xtra Airways was one of several airlines carrying flights to Florida and South Carolina, from the Midwest and Northeast since Nov. 10, 2011. The airlines were part of charter operation Direct Air, which was also known as Myrtle Beach Direct Air & Tours.

But Xtra Airways stopped flying charters for Direct Air on March 13, a move that came after Direct Air failed to pay the carrier all the money it was owed for operating flights that departed on or after March 3, according to the department. Thousands of passengers were stranded.

Federal rules require charter operators to secure customers' money in a bond or escrow account, in case a flight is canceled. Federal rules also prohibit canceling charter flights less than 10 days before departure unless it is physically impossible to operate the flight.

"Airline passengers should not have to worry about last-minute charter flight cancellations or being stranded in the middle of their trips," DOT secretary Ray LaHood said in announcing the fine.

The penalty was reached in consent with Xtra Airways, which blamed Direct Air for the cancellations.

This is the second department penalty related to Direct Air and the investigation is continuing. On July 27, the department fined World Atlantic Airlines $180,000.